Congress Authorizes Independent Financial Crisis Commission

WASHINGTON — The House passed legislation Monday intended to battle financial fraud and create an independent commission to investigate the causes of the global financial meltdown.

Lawmakers voted 338-to-52 for the bill, which now goes to President Barack Obama to sign into law.

The panel, which will recommend steps to prevent future economic crises, will be modeled on the bipartisan commission that investigated the failures that led up to the Sept. 11, 2001, terrorist strikes.

The independent inquiry would be made up of 10 members chosen among U.S. citizens with "significant experience in such fields as banking, regulation of markets, taxation, finance, economics and housing."

The commission would have broad leeway to examine the role of regulators and the Federal Reserve, along with companies' accounting practices, executive pay schemes, and use of exotic investment tools.

Possible fraud, the controversial role of credit risk agencies and short-selling on the markets are also listed in the legislation for investigation.

So too is "the global imbalance of savings" — a veiled reference to lawmakers' complaints that cash-rich China helped drive the U.S. trade deficit to record highs.

The new committee, which also would probe the government's series of hefty financial bailouts, would convene public hearings and would have subpoena power to compel testimony from reluctant witnesses.

Six of the members would be chosen by Democratic leaders in Congress and four by Republicans, but the panel would require Republican assent to issue subpoenas.

It would have 18 months to investigate the causes of what some call the worst economic crisis since the 1930s Great Depression and report back recommendations to prevent such collapses in the future.

The Senate approved the legislation 92-4 in April, followed by the House 367-59 on May 6. But senators quietly altered the bill on May 14, requiring another House vote.